Globalization and its Impacts on HR

Globalization and its Impacts on HR Practice in Southeast Bank Limited in Bangladesh

Research Background:

Introduction:

In this report of HR practices in Southeast Bank Ltd in Bangladesh we will explore the impact of HR practices in different dimensions. Globalization brings diversity and innovative way of working in Bangladesh. Basically the era of globalization practices of HR from recruitment to industrial conflicts are brought by Multinational Enterprises (MNE’s) by sending expertise or recruiting host country expertise.

MNE’S HR practices in Bangladesh has an impact as difference between headquarters and host country’s in aspect of culture, education, demographic which has considerable impact on global practices. It is unlikely standard practices will be successful regardless of geographic region.

In this report we try to find the issues and sub-issues cause problem in HR practices and proposed the solutions to overcome the barriers.

Background of organization:

Our chosen organization is southeast bank Ltd, Bangladesh. It is a scheduled private commercial bank in Bangladesh. It is established under the Bank Company Act 1991 and under Company Act 1994 incorporated as a public limited company on March 12, 1995. May 25, 1995 this bank first started their commercial banking operations. Within this short period of time the bank become financially sound and successful to make their position in a progressive and dynamic financial institution in Bangladesh. All the small and large traders of the country widely acclaimed the bank. It becomes one of the top-rated corporate borrowers, because it always appreciated as a forward looking bank and innovative ideas.

As this bank has a vision of becoming best banking service provider of the country so with this short period of time it has created a great image with achieving a great significant reputation to the banking sector in the country.

Southeast Bank Limited has been licensed by the Bangladesh Government as a private sector bank on schedule. The policy of the government was to pursue of liberalizing the banking and financial sector. From the above view, we can say that within 15 years of company actions achieved a great success with meeting the great level of capital adequacy of Bangladesh Bank. It is a second generation bank which is now fastest growing leader of that generation as a private bank as a business organization and their profitability which they showed in their 15 years statement.

The Bank has now 56 Branches spread over the country. The Bank plans to open a good number of Branches in the near future covering important geographical locations of the country catering to the growing clientele needs of trade, commerce and industry. With the passage of time the activities of the Bank has expanded significantly giving rise to complexities of operations, thus, requiring formulation of uniform operational procedures covering all updated` rules, regulations and practices of General Banking.

Southeast Bank Limited-one of the fast growing second generation private sector Banks came into being in 1995 with a view to stand out as a pioneer banking institution in the country and contribute significantly to the national economy. The Bank started commercial banking operations with an initial authorized capital of Tk.500.00 million and paid up capital of Tk.100.00 million. The Authorized capital of the Bank stands Tk.10,000.00 million and the Equity Fund (Capital and Reserve) stands Tk.9,927.16 million which includes paid up capital of Tk.3,422.66 million and Reserve Fund of Tk.6,504.52 million as on 2009.

The Bank has been successfully completing its twelfth year of operations having enjoyed the complete confidence of the depositors and achieving significant growth in the entire areas of banking operations.

The Bank has a deposit base of Tk. 96,669.05 million and loan portfolio of Tk. 51,147.28 million in the year 2009, which posted a growth of 16.93% and 20.89% respectively. During the year 2009 the Bank has earned operating profit of 4,614.66 million, which is, 28.57% higher compared to the previous year. The Bank always fulfills the provisioning requirements as set by Bangladesh Bank reflecting sound financial health and discipline.

The Bank is presently operating with 56 branches including 7 Islamic banking branches and 5 rural banking branches, plans to expand more new branches in the near future in important business hubs including rural growth-centers with solution-driven high quality banking and financial services to contribute towards expansion of trade and commerce/industry and agriculture for balanced growth and economic prosperity of the country. The consistent and increasing growth trend of the above mentioned performance indicators has increased depositors’ confidence as well as goodwill/reputation of the Bank to a great extent and these have contributed to increase the shareholders’ value.

The Bank focuses on building high-quality human resources with expertise and professional skills adopting the Human Resources Re-engineering and Development Plans with a view to creating an excellent clientele service environment for ultimate achievement of sustained profit growth making no comprises with the quality asset creation. The Bank’s Human Resource Development strategy is to build up quality manpower with conceptual/ managerial knowledge, skills through designing/ arranging of continuous in-house and outside training programs.

The Bank focuses on customer-friendly marketing approaches by offering various deposit schemes with products diversification and market segmentation ensuring efficient delivery of personalized banking services at the clients door steps and caters to the ever-growing financing needs of clientele at a competitive price The Bank introduced “On-Line Any Branch Banking” to facilitate customers to draw/deposit money & do businesses from any of the Branches irrespective of locations.

The Bank has been successful in operations of business as a financial intermediary and generated highest per Branch profit with a significantly high level of employee productivity. The company philosophy to workout best solutions for customers’ financing needs have positioned the Bank as being perceived by the customers and clients as a business and customer friendly Bank.

Research Question:

How Southeast Bank Ltd practice Human Resource and its impact on Globalization in context of Bangladesh?

Research Objectives:

Human resources management was termed people management in early days where human are being treated as resources like machineries but the HR brings the concepts human is sustainable capital.

The objective of the research has cover definite part of human resource development. These are as follows

1. Recruitment: there is significant vast difference between MNE’s from western country’s and host country recruitment process.

2. Employee relation: we will explore individualism VS collectivism, employee performance appraisal, employee participation, motivation, commitment and trust and so on.

3. Industrial relation: we will discover the involvement of trade union, employer association, Joint consultative committees (JCC’S), and government policy in industrial relation and also the impact of trade union law and union density rate and there correlation approaches.

Indicative Literature review:

Parent expertise in host country:

First expertise from parent country will expect cultural sock in host country in term of security concern, time management, attitude to woman transport, local language, excessive bureaucratic. Culture shock leads expertise hostile approaches towards HCN’S. Cultural shock creates stress and lowers the productivity and moral of employee. In US, number of employees claim compensation due to work related stress (Stephen and Susan, 2006). Its expertise job to diffuse practices from parent country to host country it could be difficult because HCN’S also find it difficult in terms of different cultural of parent.

Solution:

Most importantly to overcome culture shock is coping with uncertainty but crucial for critical to success depends on is faster adaption. Person has the experience more likely perform well in host country rather inexperience EXPERTISE. Company need gives security to the employee’s family and fringe benefit such as children education, free housing, car, furniture etc. To get best output from Expertise Company need to make them feel live in home country. Language training is necessary to understand the local language to communicate effectively. Expertise failure causes for personal adjustment problem in terms of social, cultural, economic and political and that can solve by better selection, training and mentoring the expertise.

US based carbon county board of commissioner chairman O’Gurek said that why they form union they do not need to tell us whether for social or economical reason we always been fair especially in this economic situation it’s become difficulty for the MNE’S to lobby against the union. So there is ongoing fight between capitalist and socialist. It’s become difficulty for the MNE’S to lobby against the union. So there is ongoing fight between capitalist and socialist.

Cross -culture management:

Martin (2002) said culture is largely unmanageable at the organizational level (L. Rosemary, L. Ben, and M. Hamish, 2006). MNE’s issues cross-cultural difference between nation and differences between national values and attitude. Schneider and Barsoux (1997) identified that problem exists in all society; different group will solve them in different ways. Corporate culture of parent is very difficult diffuse in the home country because values, behavior and attitude of people are significantly different. Interpret employee social and cultural values are sources of employee and management conflict. Labors demand and supply trends in the host country and their skills, industrial and technological advancement. And also section methods affect the parent recruitment policy at host country issue such as shortage of skills, favor etc. Maryann (2002) pointed that Monolithic organization is still viable which is isolating organization from pressure of change. Monolithic defender is usually preventing organization to adapt with diversity and make cultural integration.

DU GUY et al found that issue also arise in different countries workforce knowledge, discourse, power and identity (Du Guy, 2002). French and Italy practice ER IN their organization in power Terms but in Britain is opposite.

Universal approach of best practice of US based parent (high performance practice) ignore the societal aspect of host country because countries are differed as flexible adaption in Italy, diverse quality production in Germany sociotechnical in Sweden. It’s difficult for parent diffuse parent country practice in host country due to cultural diversity.

Change senior management due the retirement brings changes in the leadership style which crates problem for employees to adjust with these changes. Gender obstacles are seen as main problem in many countries. Corporate language and subsidiary language could be different and that can creates problem in communication because translation takes time. Dowling and device identifies language could be the barriers for the communication between PCN and HCN.

They focus on language standardization, dual language practice at work place Language; country like Germany prefer German rather English. Jin (1998) found that most Chinese, in English they are weaker conversational than written (S. Gunte and B. Ingamar, 2006).

Solution:

MNE’S need to reduce the local culture barriers by exporting parent culture and communicate with people the benefit of the standardization of practice. Reduce the level of interaction in cultural aspect and understand the local and practices hybrid culture for the commitment employees to achieves business goals. In terms of convergent or divergent approach parent have bring synergy. Boxel and Purcell (2003) identified for the sustainability of MNE’S developing innovative strategy and practice these to country to country (Mustafa 2005). Parent have able cope with changes in structure, procedure and employee relation practice of specific country socio-cultural aspect. MNE’S concern should be on organizational effectiveness or well-being of the employee rather strike focus on the cultural differences and adjacent.

Hofstede’s cultural frame work:

Hofstede’s cultural frame work is widely accepted across the global arena of HR practices. His five cultural dimensions are individualistic vs. collectivism, power distance, and quality of life vs. quantity of life, uncertainty avoidance and time orientation. Hofstadter’s framework of culture widely used to identifies difference between national cultures.

Power distance:

Country with low power distance reflects more flat and democratic management structure, on the other side high power distance where centralization of authority, autocratic leadership basically based on power culture. MNE’S with high power culture or lower power culture need to adapt with subsidiary power culture or convergence necessary for the success of the company.

Manager from higher power distance to lower power distance country need to understand the management style because communication flow different from his/her home country.

Example if Britain going operates it’ subsidiary company in France, Singapore and other high power distance culture. In this aspect parent need to considered adapt with subsidiary power culture and convergent the HR practices in a balance approach.

Uncertainty avoidance:

Low uncertainty avoidance by parent practices into high uncertainty avoidance subsidiary is very difficult to achieve. Manager in Britain have greater autonomy than German, so German expertise work in UK need to consider in mind.

Individualism:

United States and China stand opposite each other’s. US are individualistic and china more likely collectivist society (Stephen and Susan 2006). So, MNE’S have adjusted the rewards and performance management and mode of building relationship whether short-term or long term depends on the practice of particular society.

Masculinity:

Masculine society value money and achievement and do extra work to reach the target where feminine society are opposite they less concern about monetary rewards other than holiday and spent time with family.

Labor Market:

Discuss the demand and supply trends of HR practice in Bangladesh.

HR implication:

Labor market is varying from region to region country to country even city to city in terms of skills, ethnic background, industrial and technological advancement, level economic growth, education, vocational training etc. develop economy demand higher knowledge and technology based work host country. So subsidiary company underdeveloped countries are less able to the demand of PCN’S. Legislation also affects the recruitment and selection process of parent in Host-country. Recruitment and selection process is quite challenging in particular countries because of shortage of skills, negotiation. Company using E-recruiting will tough to diffuse in host-cost poor infrastructure.

Solution:

Host countries company shortage of knowledge could outsource from TCN’S.

Work-Life Balance:

Work-life balance differs from country to country.

HR implication:

Work life balance is important issue for business operating international. Long working hour can creates workload among the employee, negative impact on their social and also negative impact on employees health. In result this will affect the job performance of the employees. Employment law varies from country to country where in the UK average weekly working hour is 48 but its longer working hour in Japan, US, and Australia.

CIPD believes that employer should protect employee from continuously working long hour as it impact on the company overall productivity (Harris, Brewster and Sparrow 2004). Most of the writers give opinion to adapt with national culture they focuses on relationship with people, human nature, time language etc. Better understanding of these is vital to the business success.

But Hofstede work does not take consideration cultural complexity and ignore the country’s sub-culture. Although it’s important for MNE’s to use his framework to identify the cultural issues affect their convergent approach to Host country.

Hall and Hall (1990) considered communication in high context culture more focus on indirect (Japan, China) communication where low cultural (Britain, Australia) context are more direct communication.

Research Methodology:

Research Methodology can be divided into three separate ways for making the research proposal effective. These three methods are exploratory, descriptive, analytical and predictive methods. As this Globalization and its impact on HR practice itself is a broad topic, in this case Descriptive method will be most effective. Descriptive method is generally used to identify & clarify elements of the subject by analyzing every aspect of the collecting data.

For this method Quantitative data collection is the most effective one here. Under quantitative method of design &methodology some important factors has to be considered:

Ø Emphasize on collecting data regarding HR practice in Southeast Bank Limited.

Ø Concentrating on measuring scale or range of inefficiency funds or lending of money as well as analyze bank’s movements towards the global HR practice.

Sources & Acquisition of data:

Primary data:

Primary data is a collection of data from different sources which is not yet been used by any people as a subject or not yet processed by any management. It is also known as raw data which is relatively same. Here, to get a statistics from the survey we can use computer or analysis b the experts.

We will collect primary data by making a sample questioner to the employees or the authorities of the bank having answers from them. Much of the research involves getting information from employees of the bank about their perceptions concerning the HR practices and the impacts of it in globalization.

Secondary data:

Secondary data is already established b some other person not b the person who is using this data. We will collect secondary data from the website of Southeast Bank limited and other HR and related websites. We will also try to find data from the globalization related books and websites. We will information the selected bank from the Southeast Bank ltd’s website where annual report, employee responsibilities, their profile, vision, mission etc. are available. We will collect the information of the human resource practice and its impact on globalization in Bangladesh find from the different websites of Bangladesh.

Method of Data Collection and Analysis:

Quantitative data analysis method will be used for arranging the data:

Random sampling:

It doesn’t mean (Jon cunwin-‘Quantitative methods for business) haphazard selection. It means each member of the population has some calculable chances of being selected, not always equal chances as we see. It also means the converse that there is no one in the identified population who could not be selected when the sample is set up. Random sampling gives chance to every individual to be selected.

Cluster sampling:

Some population has groups or cluster which adequately represent the population as a whole for the purpose of survey. It can be said that pupils from a particular school would have many experience in common with pupils from a particular school that the errors in one file vary to another file. For making the survey of gathering information about globalizations impact on HR practice in Southeast Bank Ltd a group of employees of Southeast Bank Ltd will be selected in a cluster basis.

Quota sampling:

The most usual form of non random sampling is the Quota sampling. In this case varies characteristics of the population identified as important for the purpose of survey.

Judgmental sampling:

In judgmental sampling there is no group of people select by the surveyor to take chance or judge. This method is normally used when sample size is small & researcher wants to use the local knowledge. In this case employees experience towards HR practice in Bangladesh will be analyzed.

Convenience sampling:

As the name suggests a sample is selected on the basis that it is easy to obtain & does the job. Convenience sampling is a quick& low costs solution. It may be convenient to select our friends or a particular enquiry. In this process data will be collected from the employees whose practice is most important for this topic.

Form of presentation:

At the time of presentation, some graphs, charts & related tables of HR practice in Bangladesh with compare the other countries with a study on Southeast Bank Ltd will be shown to analyze the topic. Charts from varies economic or business journals is very much essential for presenting in a better or clear way.

Four ways of collecting data:

Interview method:

Focus group interview- A Focus (Mahhotra & John -2002) group is an interview piloted by a most trained people with great experience with few people. The moderator leads the discussions. The main purpose of focus group is to gain insights by listening to a group of people from the appropriate target market talk about the issues of interest to the researches. Focus group is the most important aspect in a qualitative research. The group size should be 8-10.

Depth interview- A depth interview is an interview where the communication is one to one where both can feel free to give interview which can go though them in depth. It is totally different from the focus group interview which is taken on a group. It is also unstructured. But it is done by person to person which is a better idea to conduct a survey. It is generally take by the high level skilled professionals. He or she focus on the employees believes, attitude and motivation which is more effective in HR practice. It naturally takes half an hour to one hour. The advantages of doing this interview are it goes deeper discussion that focus group interview. Both can freely exchange their views which are not possible in focus group interview method. Here respondents always feel free to answer the questions with their own observations in word where questions are also free.

Survey method:

The survey method is obtaining information is based on the questioning of respondents. Respondents are asked a variety of questions regarding their behavior, intentions, attitudes, awareness, motivations, demographic & lifestyle characteristics. The size of the survey will enable statistical analysis to be applied to any hypothesis. The questions may be asked verbally, written, computer systems.

It involves separate questionnaires to a willing & a co-operative responds. The respondents require some questions to answer which questions are prepared by the surveyor before questioning the respondents. This method has several advantages which are in this method questionnaire is simple to administrator; data obtained are reliable because the respondents are limited to the alternative stated. The use of fixed respond questions reduces the variability in the result that may be caused by the differences in the interviewers. Finally coding, analysis & interpretation are simple. It has different types-Central location Personal interview, Telephone interview, electronic interview, mail interview. Central location Personal interview, this research methodology is characterized by basing the survey. This survey is located in a place where the targeted people are mostly available.

Observation methods:

This method records the pattern of behavior of the people, their attitudes and gestures in a proper way or we can say in a methodological way. The observers or the surveyors do not directly feel the people attitude and they do not even directly communicate with them. Generally information is recorded or collected from the past occurrence. Observation method may be structured or unstructured, direct or indirect. Techniques such as ethnography & case study methods are involved here to find the certain types of information.

Experimentations:

In most scientific enquiry (Peter-2000) research is primarily centered about controlled experiments in which efforts are made to hold conditions constant thus enables the effect of a particular sector of variables to be studied & measured. Any change observed to have taken place in the in the test of situation is measured, statistically tested by the measure of significance. According the result of test the change may be held to attributable to the intervention of the independent variables.

For this research In-depth interview is the most appropriate one. Because depth interview is an interview where the communication is one to one where both can feel free to give interview which can go though them in depth. It is totally different from the focus group interview which is taken on a group. It is also unstructured. But it is done by person to person which is a better idea to conduct a survey. It is generally take by the high level skilled professionals. He or she focus on the employees believes, attitude and motivation which is more effective in HR practice. It naturally takes half an hour to one hour. The advantages of doing this interview are it goes deeper discussion that focus group interview. Both can freely exchange their views which are not possible in focus group interview method. Here respondents always feel free to answer the questions with their own observations in word where questions are also free.

Pilot testing:

To do this research we will use questionnaires which are needed to collect correct data from the employees of the Southeast Bank Ltd where the employees are well-educated. We will conduct a pilot study to collect proper information. With this statement (Sullivan and Gilbert 2004) suggested that pilot testing be required to create a high quality of questions because the test helps to identify and eliminate potential problems. Piloting can involve a pre-test of the conducted questionnaire on a small of respondents to certify the validity and reliability of the questions (Gill and Johnson, 1997).

Validity:

By the depth interview questions was done to ensure that the questionnaire consisted of an appropriate subject based on the research’s topic. It was concluded that the questions were suitable to the study and that the final answers version could be released. Validity is significant in doing such research as it allows the research to be both meaningful and interpretable (Symon and Khan1997). According to (Campbell-2005), validity is the ability to measure what is supposed to be measured. The most common way is to measure the face validity of the questionnaire (Karon-2000).

Reliability:

According to (Pallant-2005), internal consistency is commonly measured by using a statistical tool called the Cronbach’s coefficient alpha, which judges a score greater than 0.7 as indicating a reliable logic. Reliability refers to the consistency of a measuring instrument, i.e., the internal consistency Nachmias (1992). This is “the degree to which the items that make up the scale are all measuring the same underlying attribute” (Micheal 2000).

Access and Ethical Issue:

HR implication:

Adams (1965) suggests that individual evaluate their relationship between their input and output at work. If they found that working very hard and little reward motivation will be dropped automatically. Ethics perception are culturally different, Buelens said it is about accept difference rather mutual understanding (F. Ray 2007). In host country Child labor, longer working hour and working in below standard level those of developed parent countries.

Employee involvement and participation:

Salaonm suggests that involvement build commitment and participation involve employee take part in decision making process (Graham and mike 1995). Participation gives collective power employee increasing their role in decision making rather get information to be committed in involvement. Organization decision about work condition such as improving quality and efficiency management sometimes do not encourage employee participation. Participation build employee commitment and increase performance, employee should have the power and influence on decision making process. Once decision has been made and there is no reflection employee voice could be less encouraging for them to act on it. Power of the both parent and host countries determine the convergent or divergent HR practices. Powerful HR purely adapted takes convergent practices to host country where diffusion rate is high and vice-versa. In the aspect of shortage skilled labor issue MNE’S can outsource according country specific rules and regulation. Training and development programmed tries to implement by parent need to be culturally adapted to meet local circumstances.

Host-country government policy:

Government influences the MNE’S policy in numbers of different ways by introducing employee relations legislation (Mustafa 2005). Government is concern to protect citizen right in equal pay, equal opportunities for both man and women, disable worker, minority worker. Some countries government recognized the trade union. Government is concern about economic policy of the country where companies are bound to obey the legislation. Government policy evolves over a time-whether takes part of voluntaries or interventionist approach depends on the political party and their relationship with union. In US Government has little interference on business and company has the opportunity to do best for sustainability without any external influence. But recent economic crisis change the scenario. On other side in European Government is major employer and greater influence on businesses.

Solution:

Government with good relation with TU can be influenced through lobbying by MNE’s FDI is a national interest.

Resource Implications, Action Chart:

Phase of The Research

May

June

July

Defining The Title of Dissertation

Literature Review

Design Of The Research

Selection Of Methodology

Data Sources

Collection Of Data

Analyzing Of Data

Writing Drafts For Individual Subjects

Editing

Completing Of Final Document

The following table shows the resource implication action chart:

Conclusion:

As the research question is How Southeast Bank Ltd practice Human Resource and its impact on Globalization in context of Bangladesh? We will find out the HR practices in Southeast Bank Ltd in Bangladesh. We will also explore the impact of HR practices in different dimensions. Globalization brings diversity and innovative way of working in Bangladesh. Basically the era of globalization practices of HR from recruitment to industrial conflicts are brought by Multinational Enterprises (MNE’s) by sending expertise or recruiting host country expertise. MNE’S HR practices in Bangladesh has an impact as difference between headquarters and host country in aspect of culture, education, demographic whi